Perhaps the most bullish
indicator for U.S. housing is Warren Buffett.
The legendary investor has been buying up
real-estate brokerages around the country as he bets on a housing turnaround.
Now, he is partnering with Brookfield Asset Management, a Canadian real-estate
investor, to more than double the size of his brokerage business.
Berkshire’s HomeServices of America Inc. unit
will be the majority owner of the venture to manage a U.S. residential
real-estate affiliate network, according to a statement on the new company’s
website. The firms plan to offer a new franchise brand, Berkshire Hathaway Home
Services, starting next year. Brookfield’s network has operated under the Prudential Real Estate and Real Living
Real Estate brands.
Berkshire’s managers have been positioning the
firm to benefit as the U.S. home market recovers from its worst slump in seven
decades. The Omaha, Nebraska-based company has bought a brickmaker, won the
loan portfolio of bankrupt mortgage lender Residential Capital LLC at auction
and built its HomeServices unit by agreeing to acquire real-estate brokerages
in states including Oregon and Connecticut.
The press release says the brokerages that will
make up the new company did a combined $72 billion in sales in
2011. That's more than twice the $32 billion in sales that Berkshire did
in 2011 without the new brokerages.
The combined networks of more than 53,000
Prudential Real Estate and Real Living Real Estate agents generated in excess
of $72 billion in residential real estate sales volume in 2011, and operate
across more than 1,700 U.S. locations.
“Berkshire Hathaway HomeServices is a new
franchise brand built upon the financial strength and leadership of Brookfield
and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway
Inc. “I am confident that these partners will deliver value to the residential
real estate industry, and I am pleased to have Berkshire Hathaway be a part of
the new brand.”
...
“The strength of the Berkshire Hathaway name, coupled with the operational excellence of HomeServices and the franchising experience of Brookfield, positions Berkshire Hathaway HomeServices® as a leading real estate franchise in the U.S., building on our traditions of exceptional client service and innovation. Brookfield is excited to be a partner in creating a home for the best real estate brokers and agents in the country,” said Bruce Flatt, Brookfield Asset Management CEO.
...
“The strength of the Berkshire Hathaway name, coupled with the operational excellence of HomeServices and the franchising experience of Brookfield, positions Berkshire Hathaway HomeServices® as a leading real estate franchise in the U.S., building on our traditions of exceptional client service and innovation. Brookfield is excited to be a partner in creating a home for the best real estate brokers and agents in the country,” said Bruce Flatt, Brookfield Asset Management CEO.
Buffett has been public about his bullish
housing call for a while as he's built his residential real-estate brokerage
business, but this is a big addition.
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